10 Mar 2015
FX breaks out of six week ranges – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, comments that with FX breaking out of its six week ranges, and USD strength boosting, CAD, SEK, EUR and JPY see near-term downside risks with the greenback.
Key Quotes
“FX breaks out of six week ranges, warning of the next leg higher in the USD and pushing the USD DXY index to fresh highs.”
“EUR, JPY, AUD and NOK have broken violently out of their ranges; while most other currencies are flirting with a break. This new round of USD strength is driven by the diverging central bank policy and growth outlooks.”
“On the Fed side, the market is pulling forward expectations for the first Fed interest rate hike. This has come on the back of strengthening labour markets (nonfarm and yesterday’s LMCI); as well as relatively hawkish comments from Fed members.”
“In his final policy speech, the Fed’s Fisher suggested that it is time for a prompt rate hike; while the Fed’s Mester reiterated that she is comfortable with rate liftoff in the first half of 2015.”
“The USD from here: particularly vulnerable are the currencies with weak fundamental backdrops. Accordingly we see ongoing near‐term downside risk with CAD, SEK, AUD, EUR and JPY.”
Key Quotes
“FX breaks out of six week ranges, warning of the next leg higher in the USD and pushing the USD DXY index to fresh highs.”
“EUR, JPY, AUD and NOK have broken violently out of their ranges; while most other currencies are flirting with a break. This new round of USD strength is driven by the diverging central bank policy and growth outlooks.”
“On the Fed side, the market is pulling forward expectations for the first Fed interest rate hike. This has come on the back of strengthening labour markets (nonfarm and yesterday’s LMCI); as well as relatively hawkish comments from Fed members.”
“In his final policy speech, the Fed’s Fisher suggested that it is time for a prompt rate hike; while the Fed’s Mester reiterated that she is comfortable with rate liftoff in the first half of 2015.”
“The USD from here: particularly vulnerable are the currencies with weak fundamental backdrops. Accordingly we see ongoing near‐term downside risk with CAD, SEK, AUD, EUR and JPY.”